Woolworths South Africa in $213 million takeover bid for Country Road

BUSINESS is such a tangled web. Woolies is making a takeover bid for Country Road but it has everything to do with its acquisition of David Jones.

Country Road store in Collins St, Melbourne.

SOUTH African retailer Woolworths is making a $213 million takeover bid for Australian clothing chain Country Road.

Woolworths said the bid was for all the remaining shares in Country Road that it does not already own.

Woolworths, which already owns 88 per cent of Country Road, is offering $17 a share as part of its cash offer, a 21.4 premium to its closing price of $14 on Monday.

The remaining shareholders are retailer tsar Soloman Lew, who owns 11.8 per cent, and 179 minority shareholders who own the remaining small amount.

Soloman Lew with Mark McInnes, former boss of David Jones.

The Country Road takeover by Woolworths is likely linked to the South African company’s $2.2 billion offer for David Jones. Mr Lew has been aggressively buying up David Jones stock ahead of the shareholder vote. He has amassed 9.89 per cent in recent weeks. Analysts believe he may have been trying to block Woolworths’ takeover of David Jones in order to get the South African retailer to buy his stake in Country Road.

Woolworths South Africa has identified Country Road in its annual report as a part of the business that was performing well, which still had growth potential. Woolworths chief executive Ian Moir was formerly head of Country Road.

Adding to the fracas is the history between Mr Lew’s Premier Investments chief Mark McInnes and Mr Moir. Before Mr McInnes was ousted from DJs in the midst of a sexual harassment scandal, and Mr Moir was still running Country Road, the two men were said to have had an acrimonious relationship over dealings between Country Road and its David Jones stock and distribution arrangements.

Woolworths South Africa boss Ian Moir used to run Country Road.

A previous attempt by Woolworths to buy Country Road in 1997 failed after Mr Lew bought a stake in the retailer. “In light of the proposed acquisition of David Jones, this is a commonsense and timely opportunity to seek to reach full ownership of Country Road,” Mr Moir said. “If successful, the offer will allow Woolworths to delist Country Road, allowing Woolworths to simplify its group structure and fully integrate the businesses.”

One of the conditions for the takeover offer is that Woolworths’ takeover of David Jones goes ahead. A planned meeting of David Jones shareholders to vote on the Woolworths takeover offer on July 14 could be postponed again.